First the title. Syriana, apparently, is a term used by foreign affairs experts in Washington think-tanks to describe a possible realignment of the Middle East while playing power games and experimenting with new scenarios. Stephen Gaghan, the writer-director of the film, intends it to work more ironically, as a commentary on 'the fallacious dream that you can successfully remake nation-states in your own image'. His movie is a complex thriller about the secret working of politics of a kind established in the 1960s by John Frankenheimer in America and Francesco Rosi in Italy. In particular it recalls Rosi's The Mattei Affair, an inquiry into the mysterious death in a 1962 plane crash of Enrico Mattei, the left-wing boss of Italy's state-run oil corporation who trod on the toes of the Mafia and international business cartels. Rosi chose to use a complicated series of flashbacks so that the film's elliptical style reflected the complexity and ambiguity of its subject.

Six years ago Gaghan wrote Traffic for Steven Soderbergh to direct, and it darted around the United States and Mexico following several interwoven storylines to deal with the trade in narcotics. With Syriana he moves on to the oil business, which even President Bush has lately recognised to be a national addiction, and he hops even more widely between Washington, Houston, Geneva, Tehran, Beirut and the Persian Gulf. At first baffling, never wholly lucid but always compelling our total attention, the film introduces us to a wide range of people while feeding us pieces of a global jigsaw puzzle.

In particular it persistently returns to five characters - Bob Barnes, an experienced CIA field agent long resident in the Middle East (played by the film's producer, George Clooney); Bennett Holiday (Jeffrey Wright), a high-flying black attorney with a leading Washington law firm; Bryan Woodman (Matt Damon), an ambitious energy analyst working for an advisory company in Geneva; Prince Nasir (Alexander Siddig), the Oxford-educated son of the ageing head of a fictitious Gulf state not unlike Dubai; and Saleem Ahmed Kahn (Shahid Ahmed), a young Pakistani working as a labourer in the Gulf. The lives of all of them are affected and redirected by the machinations of people involved in the oil industry and their supporters in government, and they are variously compromised, damaged or killed. As two major American oil companies merge to become a major countervailing power to the Chinese in the Middle East, so it becomes necessary for the CIA to send Bob Barnes on an assassination mission, in order that the Prince's desire to improve the lot of his people will not upset US interests. Ahmed, the young Muslim migrant worker, is laid off by the new Chinese owners of the refinery where he works, and is given succour and purpose by a fundamentalist group with terrorist connections. Bryan believes he can both pursue his career and help bring democracy to the Middle East. Bennett the lawyer, caught between a ruthless oil company and the pressures of the Justice Department, finds a modus vivendi by throwing a few victims to the lions.

In this world of realpolitik, everyday ethics and morality are turned on their heads, and people are expendable. Sixty years ago, 'Engine Charlie' Wilson, head of General Motors, told a Senate committee charged with approving his appointment as Eisenhower's Secretary of Defence, that he thought that 'what was good for our country was good for General Motors and vice versa; the difference did not exist'. This is the view of the oil industry as presented in Syriana. One of the sacrificial black sheep handed to the Justice Department in the movie goes even further: 'Corruption? Corruption is government intrusion into market efficiencies in the form of regulation. That's Milton Friedman. He got the goddamn Nobel Prize. We have laws against it precisely so we can get away with it.'

The presence of familiar faces helps the audience to follow the complicated narrative, and in addition to the leading performances there are excellent contributions in minor roles. Chris Cooper plays a plain-speaking self-made Texas oilman, quite open about the need for cutting ethical corners. He stands in contrast to his chief legal adviser, a suave Washington legal eagle (Christopher Plummer) who operates through charm and neatly turned phrases. 'In this town you're innocent until you're investigated,' he tells Clooney.

In addition to the performances there's a wealth of memorable detail: a group of expatriate Pakistanis improvising a game of cricket on the waste land beside the refinery that has laid them off; an almost unbearably painful scene in which Barnes, the CIA man, is tortured by an Arab assassin (a menacing Mark Strong) who's changed sides; a persuasive succession of scenes in which Ahmed is transformed into a suicide bomber. Some may think it takes an unconscionable time for Barnes to become disillusioned with the CIA he has served so faithfully, but this can also be seen as a comment on the nature of loyalty and patriotism, which is one of the themes of this thoughtful, exciting and urgent film. The widescreen colour photography is the work of the gifted Robert Elswit who shot the equally good, but tonally very different monochrome movie, Good Night, and Good Luck.